-Refer to the above table. The price of Y decreases from $18 to $15. What is the cross price elasticity of demand between Y and X?
A) -0.73
B) -1.0
C) +1.38
D) +1.83

Question

-Refer to the above table. The price of Y decreases from $18 to $15. What is the cross price elasticity of demand between Y and X?
A) -0.73 
B) -1.0 
C) +1.38 
D) +1.83

Quizplus · Accepted Answer

Cross price elasticity of demand is calculated as the percentage change in the quantity demanded of X divided by the percentage change in the price of Y. If the quantity demanded of X increases when the price of Y decreases, the cross price elasticity is positive, indicating that X and Y are substitutes.

-Refer to the Above Table